Analysis Grains
Russian wheat export and price under pressure
The grain market was somewhat directionless, almost as if we can say because the American exchanges were closed. Lower prices do not directly result in better exports, as was evident from new figures from Russia. Furthermore, there is much discussion about protectionism and trade barriers now that Trump is president.
The March contract for wheat on the Matif closed €0.25 lower at €226.50 per ton yesterday. The Chicago exchange was closed yesterday. Not because of Trump's inauguration, but because the third Monday of January is Martin Luther King Jr. Day in the US.
The Russian wheat price is under pressure, but that doesn't really help the export. The Ikar price for Russian wheat dropped by $3 to $234 per ton. Russia's grain export last week amounted to 410,000 tons, according to SovEcon data. Of the total export, 390,000 tons were wheat. For comparison: a week earlier, Russia exported 520,000 tons of grain, and that week coincided with Russian Orthodox Christmas.
Sharp Edges
Now that Trump is officially in the White House, it seems that the sharp edges of the import tariffs he campaigned on are being smoothed out. Various sources within Trump's circle have confirmed that there will be no additional trade tariffs imposed in the first week. In a memo, the new president has instructed to investigate and address persistent trade deficits and unfair trade and currency policies of other countries. Trump seems to be receptive to advice that the immediate imposition of trade restrictions would likely shock the financial markets.
The threat of a trade war is not completely averted. "I will immediately start the review of our trade system to protect American workers and families," Trump said in his speech. "Instead of burdening our citizens to enrich other countries, we will impose tariffs and taxes on foreign countries so that our citizens benefit from them."
Casualty
The agricultural sector may become a casualty of a potential trade war, as evidenced by a conflict between Canada and China. In September last year, Canada imposed an additional duty on electric vehicles produced in China. In response, China announced an investigation into the anti-dumping practices of canola.
The consequences are visible in the canola import figures released by Chinese customs yesterday. In December, China imported 588,000 tons of canola from Canada, which is 12% less than the same month a year earlier. In 2024, China imported a total of 6.39 million tons of canola, compared to 5.49 million tons in 2023. Canada was by far the largest supplier of canola to China last year with 6.13 million tons. Conversely, China accounts for over 75% of Canada's canola exports, according to Farm Credit Canada.
